Cashback fraud-hit Paytm Mall partners EY to catch conmen
New Delhi: Rattled by frequent cashback fraud incidents involving its staff, e-commernce platform Paytm Mall has announced a partnership with Global professional services firm EY to build a technology-driven fraud prevention system.
The move is to undertake frequent audits to identify and prevent collusion, implement learnings from global practices as it expand operations into other geographies and strengthen the processes for merchant on-boarding and marketing, the company said in a statement on Monday.
A report in The Times of India, citing sources, claimed on Sunday that some Paytm Mall staff colluded with third-party vendors, created fake orders and received kickbacks for their assistance.
Alibaba-backed Paytm Mall, however, did not address the report directly in the statement.
“Our partnership with EY will help benchmark with global best practices as we build a ‘Technology Driven Fraud Prevention System’ to scale our operations.
“Our teams continue to work closely with EY to share our learnings and insights. We are committed to build a trusted commerce platform and will take strict action against wherever needed,” said Srinivas Mothey, Senior Vice President-Paytm Mall.
The company said it continues to de-list fraud merchants and take strict action wherever needed.
“Apart from admin, finance and other support functions, the company also has a business operations team which works closely with partnered merchants to plan and execute cashback offers and promotions leaving a scope for collusion.
“The EY partnership will also undertake audit and fraud prevention using both human and Artificial Intelligence (AI),” say Paytm Mall.
Over the past few years, Paytm has been bleeding massively in online retail business and there is no respite in sight.
The brainchild of Paytm Founder and CEO Vijay Shekhar Sharma, the ecommerce platfom’s losses have mounted and in the financial year 2018, the company posted a loss of nearly Rs 1,800 crore on revenue of Rs 774 crore.
According to Forrester Research, the market share of Paytm Mall almost halved in 2018 — to 3 per cent from 5.6 per cent in 2017.
Paytm Mall is far behind the top two e-commerce players in terms of market share. They have a single-digit share against the top leaders which are commanding over 30 per cent market share.
Paytm Mall has so far managed to raise over $650 million from Alibaba, SoftBank and SAIF Partners.